Final Results and Notice of AGM
Source: RNS
19 March 2024
TMT INVESTMENTS PLC
("TMT" or the "Company")
Results for the year ended 31 December 2023 and Notice of AGM
TMT Investments Plc (AIM: TMT), the venture capital company investing in high-growth technology companies, is pleased to announce its audited final results for the year ended 31 December 2023.
Highlights:
· NAV per share of US$6.62 (up 3.3% from US$6.41 as of 31 December 2022)
· Total NAV of US$208.1 million (US$201.7 million as of 31 December 2022)
· 5-year IRR of 16.3% per annum
· US$4.7 million of investments across 10 new and existing companies in 2023
· Praktika.AI became the 100th investment by TMT since inception
· US$4.2 million of profitable disposals during the period
· US$11.0 million in cash and cash equivalent reserves as of 18 March 2024
Alexander Selegenev, Executive Director of TMT, commented:
"In line with the technology companies' market, in 2023 TMT's portfolio has continued to see an increased divergence between the stronger and weaker performers - with the net result for TMT being positive, with the Company's NAV per share increasing by 3.3% in 2023. TMT's portfolio benefited from the positive revaluation of 12 of its companies (Backblaze, 3S Money, 1Fit, Collectly, SonicJobs, Mobilo, Synder, Educate Online, Laundryheap, Whizz, AgendaPro, and Scentbird).
During the same period TMT partially or fully wrote down the value of twelve of its investments, which have either struggled to adjust to the new "down-to-earth" reality or failed, with some smaller investees, who in the past were able to rely on the availability of cheap capital for continued funding requirements succumbing to market pressure.
TMT's five largest holdings (Bolt, Backblaze, 3S Money, PandaDoc and Scentbird) continued to perform well, with each recording double-digit annual revenue growth rates. These are mostly well capitalised companies, with generally high levels of cash reserves, a strong market presence and are typically either already operationally profitable or close to achieving profitability. These well-established companies accounted for 64% of TMT's portfolio's value as of 31 December 2023.
Continuing the trends started in 2022, 2023 saw a dramatic change in the venture capital and technology company environment, with most investors "returning to basics" by backing ultimately profitable business models at sensible valuations. The previous "growth at any cost" approach, which TMT has always structurally avoided, has now been firmly replaced with a focus on "fundamentally profitable growth at the right valuation". As a result, start-ups' success/survival rate has been largely defined by their ability to reposition and adjust to this changed market environment.
We continue to see a number of outstanding companies that are thriving in this changed market environment, and are attracting large levels of funding thanks to their strong business models and execution. We have therefore continued to make investments selectively in such companies, deploying a total of US$4.7 million across current and new portfolio companies in 2023, as well as a further US$1.0 million invested after the reporting period. Some of these investee companies announced the completion of large funding rounds in 2023, including Rain, which raised US$116m, and ON (previously known as GameON), which raised US$25m, with Forta announcing it had raised US$55m in January 2024, placing them on a well-funded path to continued growth.
TMT has capitalised on the continued share price strength of NASDAQ-traded Backblaze by disposing US$4.2 million-worth of Backblaze shares after the reporting period.
In order to provide shareholders with what we believe prudent and consistent valuations for our investments, TMT continues to prioritise the use of quoted prices and demonstrable corporate actions, such as recent fundraises, to calculate its portfolio NAVs, typically applying comparable analysis only, as is necessary, when writing down investments. Noting this approach, and given the current market backdrop, we are pleased to have delivered an increase in NAV in 2023, thanks largely to our rigorous and disciplined investment approach. With no financial debt and cash and cash equivalent reserves of US$11.0 million as of 18 March 2024, TMT is well positioned to ride out the current market volatility and to continue investing in companies that meet our investment criteria as fully as possible, while disposing of our investments whenever there is an opportunity to maximise shareholder value."
Notice of AGM
The Company's Annual General Meeting will be held on 28 May 2024 at 13 Castle Street, St. Helier, Jersey, JE1 1ES at 14:30 (BST).
Copies of the Annual Report and Accounts for the year ended 31 December 2023 ("Annual Report") and Notice of AGM will shortly be available on the Company's website at www.tmtinvestments.com.
For further information contact:
|
TMT Investments Plc Alexander Selegenev Executive Director
|
+44 370 707 4040 (Computershare - Company Secretary) alexander.selegenev@tmtinvestments.com
|
|
Strand Hanson Limited (Nominated Adviser) James Bellman / James Dance
|
+44 (0)20 7409 3494 |
|
Cavendish Capital Markets Limited (Joint Broker) Ben Jeynes / George Lawson
|
+44 (0)20 7220 0500 |
|
Hybridan LLP (Joint Broker) Claire Louise Noyce
|
+44 (0)20 3764 2341 |
|
Kinlan Communications David Hothersall
|
+44 (0)20 7638 3435 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.
About TMT Investments Plc
TMT Investments Plc invests in high-growth technology companies globally across a number of core specialist sectors. Founded in 2010, TMT has a current investment portfolio of over 50 companies and net assets of US$208 million as of 31 December 2023. The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. The Company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com.
EXECUTIVE DIRECTOR'S STATEMENT
In 2023, the venture capital markets generally continued to experience a higher degree of market and economic volatility.
Investors' increased focus on start-ups' profitability has created a "survival of the fittest" market environment. On the one hand, companies with superior products and business models that have continued to grow and improve profitability continue to attract new capital at higher valuations. On the other hand, companies with weaker business models or non-mission critical products that were more dependent on future funding have come under increased pressure.
In line with the market, TMT's portfolio has continued to see an increased divergence between the stronger and weaker performers. Despite the ongoing challenges in the macroeconomic and political environment, investors in 2023 continued to back fast-growing, high-quality digital technology companies. We were pleased to see 3S Money, 1Fit, Collectly, SonicJobs, Mobilo, Synder, Educate Online, Laundryheap, Whizz, and AgendaPro receive further validation of their progress by raising fresh capital at higher valuation levels. These are companies operating in "tried and tested" sectors that benefit from well-established revenues and spending habits, be they, for example, payments, education, accounting software or laundry services, rather than seeking to devise completely new revenue streams. These portfolio companies are successfully competing and gaining market share against incumbents by adding significant value, be it through more efficient technology, better service, consolidation or other benefits. The combination of these factors, together with nimble execution and a focus on profitability, placed them in a favourable position to successfully raise fresh capital.
The value of TMT's equity stake in NASDAQ-traded cloud storage company Backblaze (www.backblaze.com), varied during the period, partly driven by the volatility in the share prices of many publicly traded technology companies. Based on Backblaze's closing mid-market price of US$7.59 per share as of 29 December 2023, TMT's stake in Backblaze recorded a US$5.4 million increase in value compared to 31 December 2022. Backblaze's business has been developing well, recording 20% revenue growth in 2023 compared to 2022. Backblaze remains sufficiently capitalised, with an estimated net debt position of approximately US$3 million as of 31 December 2023. TMT availed itself of the opportunity provided by Backblaze's improved share price to dispose of approximately 8% of its shares in Backblaze during 2023 for a total consideration of US$2.1 million. Backblaze's closing mid-market price on 15 March 2024 was US$10.04 per share.
TMT adopts a highly prudent approach to valuing its portfolio investments and therefore regularly reviews and writes down investments that are not showing the progress TMT believes is required to justify the previously reported valuation level. As a result, during the period TMT partially or fully wrote down the value of twelve of its investments (excluding the additional write-downs related purely to exchange rate fluctuations). This resulted in US$16 million of partial and full write downs.
In December 2023, TMT made its 100th investment since TMT's inception in 2010. Over the period since inception, the Company has generated a number of landmark multi-million dollar exits, US$105 million-worth of full and partial profitable disposals, four unicorns and a 16% annual IRR (internal rate of return). At the end of December 2023, 64% of TMT's portfolio value was accounted for by its five largest holdings. These are companies with strongly established business models, with a strong market presence and expanding, and typically either already operationally profitable or close to achieving profitability. The remainder of the portfolio is made up of companies in their early and mid-stages, a number of which are making admirable progress in the current environment. This means that TMT's portfolio today is a far cry from its make-up of earlier-stage start-ups in the early years.
NAV per share
The Company's NAV per share in 2023 increased by 3.3% to US$6.62 as of 31 December 2023 (31 December 2022: US$6.41), mainly as a result of the upward revaluation of Backblaze and Collectly during the period.
Operating expenses
In 2023, the Company's administrative expenses of US$1.3 million were below the corresponding 2022 figure of US$1.4 million, reflecting the Company's reduced level of investment and business development activities during the period.
Financial position
As of 31 December 2023, the Company had no financial debt and cash and cash equivalent reserves of US$6.6 million (31 December 2022: US$10.1 million). As of 18 March 2024, the Company had cash and cash equivalent reserves of US$11.0 million.
Outlook
TMT has a diversified investment portfolio of over 50 companies, focused primarily on Big Data/Cloud, SaaS (software-as-a-service), Mobility, and FinTech.
Despite the ongoing market and political volatility, investors continue to invest in high-quality technology businesses at the appropriate valuation levels. TMT is continuing to identify such opportunities very selectively, whilst employing a generally cautious investment approach. With no financial debt and cash and cash equivalent reserves of US$11.0 million as of 18 March 2024, TMT is well positioned to ride out the current market volatility and to continue making investments and realising full and partial disposals when the right opportunities present themselves.
Alexander Selegenev
Executive Director
18 March 2024
PORTFOLIO DEVELOPMENTS
The following developments have had an impact on, and are reflected in, the Company's NAV and/or financial statements as of 31 December 2023 in accordance with applicable accounting standards.
Profitable full and partial cash exits, and positive revaluations:
· In January and March 2023, TMT received a total additional US$1.6 million in dividends from Hugo, as part of the consideration for Hugo's disposal of its food delivery and quick commerce business in Central America to Delivery Hero completed in 2022.
· In February 2023, TMT received US$0.3 million from Backblaze, Inc., as a settlement payment in respect of TMT's additional investment in Backblaze in 2021. In addition, TMT disposed of 8% of its equity stake in Backblaze in 2023, for a total net consideration of US$2.1 million.
The following of the Company's portfolio investments were positively revalued as of 31 December 2023:
|
Portfolio company |
Portfolio company description |
Positive revaluation amount (US$) |
As % of fair value reported as of 31 Dec 2022 |
Basis for revaluation |
|
Backblaze, Inc. |
NASDAQ-listed cloud storage and data back-up company (www.backblaze.com) |
5,361,766 |
23% |
Based on the closing mid-market price of US$7.59 per share on 29 December 2023 (incl. US$0.3m settlement and US$2.1m partial disposal proceeds received in 2023) |
|
Collectly, Inc. |
Patient billing platform for medical organisations (www.collectly.co) |
4,389,328 |
213% |
New funding round (equity) |
|
3S Money Club Limited |
Provider of global business bank account and payment solutions (www.3s.money) |
3,016,809* |
21% |
New funding round (equity) |
|
Educate Online Inc. |
Distance education platform for children and young adults aged 4-19 (www.educate-online.io) |
1,847,458 |
185% |
New funding round (simple agreement for future equity ("SAFE")) |
|
CloudBusiness Inc., trading as Synder |
Accounting software solution (www.synder.com) |
1,368,571 |
66% |
New funding round (SAFE) |
|
Alippe, Inc., trading as 1Fit |
Mobile app providing users with access to multiple gyms and yoga studios in Central Asia (https://1fit.app) |
1,080,320 |
216% |
New funding round (SAFE) |
|
Laundryheap |
On-demand laundry and dry-cleaning services (https://www.laundryheap.co.uk/) |
993,810* |
55% |
New funding round (equity) |
|
My Device Inc., trading as Whizz |
Device-as-a-service e-bike rental company (www.getwhizz.com), |
739,241 |
70% |
New funding round (equity) |
|
Lulu Systems, Inc., trading as Mobilo |
Smart digital business card solution (www.mobilocard.com) |
470,000 |
46% |
New funding round (SAFE) |
|
Scentbird, Inc. |
Perfume subscription service (www.scentbird.com) |
418,646 |
6% |
Independent 3rd party secondary share sale transaction |
|
AgendaPro, Inc. |
SaaS-based scheduling, payment and marketing solution for the beauty and wellness industry in Latin America (www.agendapro.com) |
395,609 |
77% |
New funding round (SAFE) |
|
SonicJobs App Ltd. |
Job search app focused on "blue collar" positions (www.sonicjobs.com), |
283,666* |
46% |
New funding round (equity) |
|
Total |
|
20,365,224 |
|
|
* - incl. foreign exchange effect
In addition, the following of TMT's non-USD denominated investments increased in value due to favourable exchange rate movements as of 31 December 2023: Bolt, Timbeter, Feel, Hinterview, MTL (Outfund), FemTech, Outvio, EstateGuru, and Bairro.
Negative revaluations:
The following of the Company's portfolio investments were negatively revalued as of 31 December 2023:
|
Portfolio Company |
Write-down amount (US$) |
Reduction as % of fair value reported as of 31 Dec 2022 |
Reasons for write-down |
|
Muncher |
2,853,697 |
50% |
Business negatively affected by the recent market conditions |
|
PandaDoc |
2,830,644 |
26% |
Valuation adjusted based on an independent secondary share sale offer received by TMT |
|
Bafood |
2,500,000 |
100% |
Business negatively affected by exposure to Ukraine and changed market conditions in the sector |
|
Rocket Games (Legion Farm) |
1,650,000 |
100% |
Disappointing performance during the year; prospects unclear |
|
Conte.ai (Postoplan) |
1,628,090 |
100% |
Business negatively affected by the recent market conditions |
|
Scalarr |
1,378,282 |
100% |
Business negatively affected by the recent market conditions and staff's exposure to Ukraine |
|
Metrospeedy |
1,000,000 |
100% |
Business negatively affected by the current economic environment and changed market conditions in the sector |
|
Qumata |
909,411 |
50% |
Limited progress with the previous product; a pivot is underway |
|
Wanelo |
602,447 |
100% |
No response from the company in the last two years; limited website functionality; assumed zero equity value |
|
Academy of Change |
330,000 |
100% |
Final write-off due to lack of progress in repositioning the business. Company is being liquidated. |
|
Go X |
175,000 |
50% |
Limited progress in the last two years; prospects unclear |
|
ClassTag |
101,965 |
25% |
Cash exit transaction completed in August 2023, with US$0.28 million (94% of the total cash consideration due to TMT) received to date |
|
Total |
15,959,536 |
|
|
In addition, TMT's non-USD denominated investment in eAgronom decreased in value due to exchange rate fluctuations as of 31 December 2023.
Key developments for the five largest portfolio holdings in the first half of 2023 (source: TMT's portfolio companies):
Bolt (ride-hailing and food delivery service):
· Active in over 550 cities globally (up from over 500 cities as of 31 December 2022)
· Double-digit revenue growth
· Announced plans to achieve profitability in 2024 and potentially float in 2025
Backblaze (cloud storage provider):
· Double-digit revenue growth
· Multiple new integrations and partnerships building basis for future growth
· Positive adjusted EBITDA achieved in Q4 2023
3S Money (provider of global business account and payment solutions):
· Double-digit revenue growth
· Regulatory permissions obtained in Luxemburg, Dubai and Singapore
· EBITDA positive
PandaDoc (proposal automation and contract management software):
· Double-digit revenue growth
· Over 50,000 customers (from over 40,000 as of 31 December 2022)
· Acquired Berlin-based fintech start-up Denario in a move to further accelerate its growth into a leading all-in-one document and payment workflow platform
Scentbird (Perfume, wellness and beauty product subscription service):
· Double-digit revenue growth
· EBITDA positive
Further investments:
Given the persistently high level of market uncertainty and volatility, TMT continued to be more selective and made the following investments in 2023:
Follow-on investments during the reporting period:
· €150,000 in Bairrissimo, LDA, trading as Bairro, an instant food and grocery delivery company in Portugal (https://bairro.io);
· US$100,000 in Cyberwrite, an AI cyber insurance platform providing cybersecurity insights and risk quantification for businesses worldwide (www.cyberwrite.com);
· £45,861 in FemTech, a London-based technology accelerator focused on female founders (www.femtechlab.com);
· US$500,000 in Alippe, Inc., trading as 1Fit, a mobile app providing users with access to multiple gyms and yoga studios in Central Asia (https://1fit.app); and
· US$200,000 in Lulu Systems, Inc., trading as Mobilo, a smart digital business card solution (www.mobilocard.com).
New investments during the reporting period:
· US$500,000 in Phoenix Health Inc., a Canada-based direct-to-consumer health platform for men (www.phoenix.ca);
· US$1,000,000 in GameOn Inc., an AI chat platform that powers conversational experiences for fashion, sport and retail brands and teams (www.gameontechnology.com);
· US$700,000 in Montera, Inc., trading as Forta, a family-powered autism therapy platform (www.fortahealth.com);
· US$1,000,000 in Rain Technologies Inc., a provider of easy and instant access to earned wages (www.rainapp.com); and
· US$400,000 in Praktika.AI, a language learning app with personal AI avatar tutors (www.praktika.ai).
New investments after the reporting period
· US$1,000,000 in Propertymate Inc., trading as NewHomesMate, a marketplace for newly built homes (www.newhomesmate.com)
Other events after the reporting period
In January 2024, TMT received a total additional US$1.5 million in dividends from Hugo, as part of the consideration for Hugo's disposal of its food delivery and quick commerce business in Central America to Delivery Hero completed in 2022.
TMT disposed a part of its shares in NASDAQ-traded Backblaze for a total net consideration of US$4.2 million.
CORPORATE GOVERNANCE STATEMENT
The Board fully endorses the importance of good corporate governance and has adopted the 2018 Quoted Companies Alliance Corporate Governance Code for Small and Mid-Sized Companies (the "QCA Code"), which the Board believes to be the most appropriate corporate governance code given the Company's size, stage of development and AIM-traded status. The QCA Code is a practical, outcome-oriented approach to corporate governance that is tailored for small and mid-size quoted companies in the UK and which provides the Company with the framework and effective oversight to help ensure that a strong level of governance is maintained.
In accordance with the QCA Code and AIM Rule 26, a report providing a high-level overview of how TMT has applied the principles of the QCA Code and any areas in which the Company's governance structures and practices depart from or differ from the expectations of the QCA Code can be found within the Company's Annual Report and will be available on the Company's website following publication.
DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and audited financial statements of the Company for the year ended 31 December 2023.
Principal activity and review of the business
TMT Investments Plc ("TMT" or the "Company") was incorporated under the laws of Jersey. The Company has been established for the purpose of making investments in the TMT sector where the Directors believe there is a potential for growth and the creation of shareholder value. The Company primarily targets companies operating in markets that the Directors believe have strong growth potential and having the potential to become multinational businesses. The Company can invest in any region of the world.
Results and dividends
The profit for the year amounted to US$6,377,773 (2022: loss of US$81,393,833), which includes a profit on changes in fair value of financial assets at Fair Value through profit and loss ("FVPL") of US$7,341,554 (2022: loss of US$79,638,928).
Further information on the Company's results and financial position is included in the financial statements.
The board has decided that it will not recommend a final dividend (2022: nil).
Company listing
TMT is traded on the AIM market ("AIM") of the London Stock Exchange. The Company's ticker is TMT. Information required by AIM Rule 26 is available in the 'Investor Relations' section of the Company's website at www.tmtinvestments.com.
Board meetings
Three Board meetings, two meeting of the Audit Committee, and one meeting of the Remuneration Committee were held in 2023. The number of meetings attended by the Directors is set out below.
|
Director |
Board meetings |
Audit Committee meetings |
Remuneration Committee meetings |
Nomination Committee meetings |
|
Yuri Mostovoy |
3 |
- |
- |
- |
|
Alexander Selegenev |
1 |
- |
- |
- |
|
Andrea Nastaj |
3 |
2 |
1 |
- |
|
James Mullins |
3 |
2 |
1 |
- |
|
Total meetings |
3 |
2 |
1 |
- |
Changes in share capital
The Company has one class of ordinary share that carries no right to fixed income, and each share carries the right to one vote at general meetings of the Company. As at 31 December 2023 and the date of this report, the Company's issued share capital consisted of 31,451,538 ordinary shares of no par value each in the Company.
Substantial shareholdings
The Directors are aware of the following shareholdings of 3% or more of the issued share capital of the Company as of 18 March 2024.
|
Shareholders |
Number of ordinary shares |
% of issued ordinary share capital |
|
Macmillan Trading Company Limited |
7,076,058 |
22.50% |
|
Wissey Trade & Invest Ltd |
5,000,000 |
15.90% |
|
Ramify Consulting Corp |
4,728,576 |
15.03% |
|
Zaur Ganiev |
2,443,810 |
7.77% |
|
Canaccord Genuity Group Inc |
2,154,939 |
6.85% |
|
Merit Systems Inc. |
2,054,865 |
6.53% |
|
Menostar Holdings Limited |
1,503,489 |
4.78% |
|
Eclectic Capital Limited |
1,224,442 |
3.89% |
|
Others |
5,265,359 |
16.75% |
|
Total |
31,451,538 |
100.00% |
Concert Party
A concert party, as defined in the City Code on Takeovers and Mergers (the "Code"), currently exists, consisting of the following shareholders:
|
Shareholder (legal holder) |
Beneficial holder (if different to legal holder) |
No. of Ordinary Shares |
% of issued share capital |
|
Macmillan Trading Company Limited ("Macmillan") |
Alexander Morgulchik 45.05%, German Kaplun 37.17%, Artemii Iniutin 17.78% |
7,076,058 |
22.50% |
|
Wissey Trade & Invest Ltd ("Wissey") |
Andrey Kareev |
5,000,000 |
15.90% |
|
Ramify Consulting Corp. ("Ramify") |
German Kaplun |
4,728,576 |
15.03% |
|
Merit Systems Inc. |
Artemii Iniutin |
2,054,865 |
6.53% |
|
Menostar Holdings Limited ("Menostar") |
Dmitry Kirpichenko |
1,503,489 |
4.78% |
|
Eclectic Capital Limited ("Eclectic") |
Nika Kirpichenko |
1,224,442 |
3.89% |
|
Natalia Inyutina (Adult daughter of Artemii Iniutin) |
727,156 |
2.31% |
|
|
Artemii Iniutin |
|
380,877 |
1.21% |
|
Vlada Kaplun (Adult Daughter of German Kaplun) |
363,578 |
1.16% |
|
|
Marina Kedrova (Adult Daughter of German Kaplun) |
363,578 |
1.16% |
|
|
German Kaplun |
|
138,938 |
0.44% |
|
Alexander Morgulchik |
|
138,938 |
0.44% |
|
Total |
|
23,700,495 |
75.36% |
Since September 2013, when the Company became subject to the Code, the concert party has been interested in, in aggregate, more than 50% of the Company's issued share capital at all times.
The total direct and indirect interest in TMT by the concert party's beneficial holders are as follows:
|
Beneficial holder |
No. of Ordinary Shares |
% of issued share capital |
|
German Kaplun |
7,497,458 |
23.84% |
|
Andrey Kareev |
5,000,000 |
15.90% |
|
Artemii Iniutin |
3,694,092 |
11.75% |
|
Alexander Morgulchik |
3,326,702 |
10.58% |
|
Dmitry Kirpichenko |
1,503,489 |
4.78% |
|
Nika Kirpichenko |
1,224,442 |
3.89% |
|
Natalia Inyutina |
727,156 |
2.31% |
|
Vlada Kaplun |
363,578 |
1.16% |
|
Marina Kedrova |
363,578 |
1.16% |
|
Total |
23,700,495 |
75.36% |
NOTES:
The majority of the ordinary shares held by Eclectic were previously held by Menostar, who invested in the Company at the time of its Admission. The beneficial owner of Eclectic is Nika Kirpichenko who is the wife of Dmitry Kirpichenko, the beneficial owner of Menostar. Wissey and Menostar both invested in the Company on its Admission and, along with Eclectic, have invested in and/or been otherwise involved with other business ventures associated with the two founders of the Company Alexander Morgulchik and German Kaplun.
The Company will update this disclosure in future annual financial reports and, if relevant, via RNS announcements.
Directors
During the financial year the following Directors held office:
Yuri Mostovoy Non-executive Chairman
Alexander Selegenev Executive Director
James Joseph Mullins Independent Non-Executive Director
Andrea Nastaj Independent Non-Executive Director
The Directors' fees for 2023 and 2022 were as follows:
|
Director |
|
|
2023 USD |
2022 USD |
|
Yuri Mostovoy |
|
|
56,250 |
55,000 |
|
Alexander Selegenev |
|
|
113,750 |
110,000 |
|
James Joseph Mullins |
|
|
28,077 |
27,081 |
|
Petr Lanin |
|
|
- |
9,347 |
|
Andrea Nastaj |
|
|
18,741 |
10,738 |
Subsequent events post the period end
In January 2024, TMT received a total additional US$1.5 million in dividends from Hugo, as part of the consideration for Hugo's disposal of its food delivery and quick commerce business in Central America to Delivery Hero completed in 2022.
TMT invested US$1,000,000 in Propertymate Inc., trading as NewHomesMate, a marketplace for newly built homes (www.newhomesmate.com)
TMT disposed a part of its shares in NASDAQ-traded Backblaze for a total net consideration of US$4.2 million.
Statement of Directors' responsibilities in respect of the annual report and the financial statements
The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and UK-adopted International Financial Reporting Standards ("IFRSs").
The Companies (Jersey) Law 1991 (as amended) ("Companies Law") requires the Directors to prepare financial statements for each financial year. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Law. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Directors are responsible for the preparation of the Directors' report and corporate governance statement. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for that period. In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable UK-adopted IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
Directors' responsibility statement
Each of the Directors, whose names are listed in the Directors section above confirm that, to the best of each person's knowledge and belief:
· the financial statements, prepared in accordance with UK-adopted IFRSs, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
· the Directors' report contained in the annual report includes a true and fair review of the development and performance of the business and the position of the Company.
Going concern
The Directors confirm that, after giving due consideration to the financial position and expected cash flows of the Company; they have a reasonable expectation that the Company will have adequate cash resources to continue in operational existence for the foreseeable future, and for at least one year from the date of approval of these financial statements and they have therefore adopted the going concern basis in preparing the financial statements.
Disclosure of information to auditors
Each of the persons who is a Director at the date of approval of this annual report confirms that:
· so far as the Directors are aware, there is no relevant audit information of which the Company's auditors are unaware; and
· the Directors have taken steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The Company's auditors will be proposed for reappointment at the Company's next scheduled AGM.
On behalf of the Board of Directors
Alexander Selegenev
Executive Director
18 March 2024
FINANCIAL STATEMENTS
Statement of Comprehensive Income
|
|
|
For the year ended |
For the year ended |
|
|
Notes |
USD |
USD |
|
Gains/(Losses) on investments |
3 |
7,357,560 |
(79,864,874) |
|
Dividend income |
|
36,883 |
105,844 |
|
Total investment income/(loss) |
|
7,394,443 |
(79,759,030) |
|
Expenses |
|
|
|
|
Administrative expenses |
5 |
(1,322,882) |
(1,443,395) |
|
Operating gain/(loss) |
|
6,071,561 |
(81,202,425) |
|
Finance income, net |
7 |
263,441 |
9,729 |
|
Currency exchange gain/(loss) |
|
42,771 |
(201,137) |
|
Gain/(Loss) before taxation |
|
6,377,773 |
(81,393,833) |
|
Taxation |
8 |
- |
- |
|
Gain/(Loss) attributable to equity shareholders |
|
6,377,773 |
(81,393,833) |
|
Total comprehensive income/(loss) for the year |
|
6,377,773 |
(81,393,833) |
|
Gain/(Loss) per share |
|
|
|
|
Basic and diluted gain/(loss) per share (cents per share) |
9 |
20.28 |
(258.78) |
Statement of Financial Position
Company registration number: 106628 (Jersey)
|
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
Notes |
USD |
USD |
|
Non‑current assets |
|
|
|
|
Financial assets at FVPL |
10 |
203,086,676 |
195,260,535 |
|
Total non‑current assets |
|
203,086,676 |
195,260,535 |
|
Current assets |
|
|
|
|
Trade and other receivables |
11 |
151,908 |
1,382,811 |
|
Cash and cash equivalents |
12 |
6,590,935 |
10,102,683 |
|
Total current assets |
|
6,742,843 |
11,485,494 |
|
Total assets |
|
209,829,519 |
206,746,029 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
13 |
1,717,816 |
5,012,099 |
|
Total current liabilities |
|
1,717,816 |
5,012,099 |
|
Total liabilities |
|
1,717,816 |
5,012,099 |
|
Net assets |
|
208,111,703 |
201,733,930 |
|
Equity |
|
|
|
|
Share capital |
14 |
53,283,415 |
53,283,415 |
|
Retaining earnings |
|
154,828,288 |
148,450,515 |
|
Total equity |
|
208,111,703 |
201,733,930 |
Statement of Cash Flows
|
|
|
For the year ended |
For the year ended |
|
|
Notes |
USD |
USD |
|
Operating activities |
|
|
|
|
Gain/(Loss) attributable to equity shareholders |
|
6,377,773 |
(81,393,833) |
|
Adjustments for non‑cash items: |
|
|
|
|
Changes in fair value of financial assets at FVPL |
3 |
(7,341,554) |
79,638,928 |
|
Interest received |
|
(263,441) |
(9,729) |
|
Impairment of receivables |
|
52,510 |
249,060 |
|
|
|
(1,174,712) |
(1,515,574) |
|
Changes in working capital: |
|
|
|
|
Decrease in trade and other receivables |
11 |
1,178,393 |
418,778 |
|
Decrease in trade and other payables |
13 |
(3,294,283) |
(4,892,724) |
|
Net cash used in operating activities |
|
(3,290,602) |
(5,989,520) |
|
Investing activities |
|
|
|
|
Purchase of financial assets at FVPL |
10 |
(4,686,489) |
(9,608,593) |
|
Proceeds from sale/disposal of financial assets at FVPL |
10 |
4,201,902 |
163,266 |
|
Interest received on treasury bills and deposits |
7 |
263,441 |
9,729 |
|
Net cash used in investing activities |
|
(221,146) |
(9,435,598) |
|
Decrease in cash and cash equivalents |
|
(3,511,748) |
(15,425,118) |
|
Cash and cash equivalents at the beginning of the year |
|
10,102,683 |
25,527,801 |
|
Cash and cash equivalents at the end of the year |
12 |
6,590,935 |
10,102,683 |
Statement of Changes in Equity
For the year ended 31 December 2022 and for the year ended 31 December 2023, USD
|
|
|
Share capital |
Retained earnings |
Total |
|
|
Note |
USD |
USD |
USD |
|
Balance at 31 December 2021 |
|
53,283,415 |
229,844,348 |
283,127,763 |
|
Comprehensive loss |
|
|
|
|
|
Loss for the year |
|
- |
(81,393,833) |
(81,393,833) |
|
Total comprehensive loss for the year |
|
- |
(81,393,833) |
(81,393,833) |
|
Balance at 31 December 2022 |
|
53,283,415 |
148,450,515 |
201,733,930 |
|
Gain for the year |
|
- |
6,377,773 |
6,377,773 |
|
Total comprehensive income for the year |
|
- |
6,377,773 |
6,377,773 |
|
Balance at 31 December 2023 |
|
53,283,415 |
154,828,288 |
208,111,703 |
The financial statements were approved by the Board of Directors on 18 March 2024 and were signed on its behalf by:
Alexander Selegenev
Executive Director
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
1. Company information
TMT Investments Plc ("TMT" or the "Company") is a company incorporated in Jersey with its registered office at 13 Castle Street, St Helier, Jersey, JE1 1ES, Channel Islands.
The Company was incorporated and registered on 30 September 2010 in Jersey under the Companies (Jersey) Law 1991 (as amended) with registration number 106628 under the name TMT Investments Limited. The Company obtained consent from the Jersey Financial Services Commission pursuant to the Control of Borrowing (Jersey) Order 1985 on 30 September 2010. On 1 December 2010 the Company re‑registered as a public company and changed its name to TMT Investments Plc. The Company's ordinary shares were admitted to trading on the AIM market of the London Stock Exchange on 10 December 2010.
The memorandum and articles of association of the Company do not restrict its activities and therefore it has unlimited legal capacity. The Company's ability to implement its Investment Policy and achieve its desired returns will be limited by its ability to identify and acquire suitable investments. Suitable investment opportunities may not always be readily available.
The Company seeks to make investments in any region of the world. The Company invests in high‑growth technology companies globally across a number of core specialist sectors. The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation.
Financial statements of the Company are prepared by and approved by the Directors in accordance with International Financial Reporting Standards, UK‑adopted International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board ("IFRSs"). The Company's accounting reference date is 31 December.
2. Summary of significant accounting policies
2.1. Basis of presentation
The principal accounting policies applied by the Company in the preparation of these financial statements are set out below and have been applied consistently.
The financial statements have been prepared on a going concern basis, under the historical cost basis as modified by the fair value of financial assets at FVPL, as explained in the accounting policies below, and in accordance with IFRS. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
The preparation of financial statements, in compliance with UK adopted International Accounting Standards, requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 2.12).
2.2. Going concern
The Directors confirm that, after giving due consideration to the financial position and expected cash flows of the Company and due to availability of highly liquid investments readily realisable for cash should this be needed; they have a reasonable expectation that the Company will have adequate cash resources to continue in operational existence for the foreseeable future, and for at least one year from the date of approval of these financial statements and they have therefore adopted the going concern basis in preparing the financial statements.
2.3. Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision‑maker who is responsible for allocating resources and assessing performance of the operating segments and which has been identified as the Board that make strategic decisions. For the purposes of IFRS 8 'Operating Segments' the Company currently has one segment, being 'Investing in the TMT sector'.
Even though the Company only invests in the TMT sector, there are still geographical disclosures that need to be made to comply with IFRS 8 'Operating Segments'.
2.4. Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the Company are measured in United States Dollars ('US dollars', 'USD' or 'US$'), which is the Company's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into US$ using the exchange rates prevailing at the dates of the transactions. Foreign currency monetary items are translated using the closing rate (i.e. mid‑market price investments).
Non‑monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. (i.e. comparable company analysis and cost‑based investments as these are effectively re‑fair valued at each year‑end).
Exchange differences arising from the translation at the year‑end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
|
|
Conversion rates, USD |
|
|
Currency |
As at |
Average rate, 2023 |
|
British pounds |
1.2747 |
1.2393 |
|
Euro |
1.1047 |
1.0862 |
2.5. Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, and other short‑term highly liquid investments with maturities of three months or less from the date of acquisition.
2.6. Financial assets and liabilities
Recognition and measurement
The Company recognises financial assets and liabilities when it becomes party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Financial assets are initially measured at fair value adjusted for transaction costs (where applicable). Financial assets are classified into the following categories:
· amortised cost;
· fair value through profit or loss (FVPL); and
· fair value through other comprehensive income (FVOCI).
In the periods presented, the Company did not have any financial assets categorised as FVOCI. The classification is determined by both:
· the entity's business model for managing the financial asset; and
· the contractual cash flow characteristics of the financial asset.
Subsequent measurement
FVPL
All financial investments of the Company are measured at fair value through profit or loss and are subject to a fair value revaluation at year end date.
The Company manages its investments with a view of profiting from the receipt of dividends and changes in fair value of equity investments. Financial assets of the Company comprise of listed and unlisted equity investments, convertible promissory notes and SAFEs. All the financial assets are not for trading and are classified as financial assets at FVPL. Directly attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.
When measuring the fair value of a financial instrument, the Company uses relevant transactions during the year or shortly after the year end, which gives an indication of fair value and considers other valuation methods to provide evidence of value. The "price of recent investment" methodology is used mainly for venture capital investments, and the fair value is derived by reference to the most recent financing round or sizeable partial disposal. Fair value change is only recognised if that round involved a new external investor. From time to time, the Company may assess the fair value in the absence of a relevant independent transaction by relying on other market observable data and valuation techniques, such as the analysis of comparable companies and/or comparable transactions. The nature of such valuation techniques is highly judgmental and dependent on the market sentiment at the time of the analysis.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Company is the mid‑market price at the time. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. Specific valuation techniques used to value financial instruments include the use of quoted market prices or dealer quotes for similar instruments.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Transfers between levels of the fair value hierarchy, for the purpose of preparing these financial statements, are deemed to have occurred at the beginning of the reporting period.
Where an active market is established for an investment it is classified to level 1 with a mid‑market price valuation methodology applied. Where observable market data becomes available for an investment, including for comparable companies within an active market, it is classified to level 2 with comparable company analysis used as the valuation methodology. The investment otherwise remains classified to level 3, with the cost of investment or price of recent investment valuation methodology applied.
Financial assets that qualify as an associate, as 20% or more of the voting rights are held by the company, are exempt from IAS 28 'Investments in Associates', as TMT is a venture capital organisation. Such investments are therefore treated as financial assets at FVPL.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions:
· they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
· the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and other receivables fall into this category of financial instruments.
Impairment of Financial Assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model to be applied. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. IFRS 9 requires the Company to recognise a loss allowance for expected credit losses on receivables. In particular, IFRS 9 requires the Company to measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses (ECL) if the credit risk on that financial instrument has increased significantly since initial recognition, or if the financial instrument is a purchased or originated credit‑impaired financial asset. However, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Company is required to measure the loss allowance for that financial instrument at an amount equal to 12 months ECL.
Income
Interest income from convertible notes receivable is recognised as it accrues by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash flows through the expected life of the financial asset to the asset's carrying value.
2.7. Net finance income
Net finance income comprises interest income on deposits, bank balances and other cash equivalents. Interest income is recognised as it accrues in the statement of comprehensive income, using the effective interest method.
2.8. Taxation
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax is provided in full using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates that are expected to apply when the related deferred tax asset is realised or when the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.
The Company is incorporated in Jersey. There are not any tax expenses recognised in the Statement of comprehensive income as the Company's current income tax rate in Jersey is 0%.
2.9. Equity instruments
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
2.10. New IFRSs and interpretations
The following standards and amendments became effective from 1 January 2023, but did not have any impact on the Company:
· IFRS 17 Insurance Contracts;
· Amendments to IFRS 17 - Initial Application of IFRS 17 & IFRS 9 (Comparative Information);
· Amendments to IAS 1 ‑ Presentation of Financial Statements (Classification of Liabilities as Current or Non‑current);
· Amendments to IAS 1 and IFRS Practice Statement 2 - Making Materiality Judgements (Disclosure of Accounting Policies);
· Amendments to IAS 12 - Income Taxes (Deferred Tax related to Assets and Liabilities arising from a Single Transaction);
· Amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors (Definition of Accounting Estimates).
2.11. Future IFRS changes
The following table summarises changes to IFRS adoption which is mandatory for periods beginning in 2024 and beyond:
|
Standard |
Effective date |
Overview |
|
Amendment to IFRS 16 - Leases on sale and leaseback |
1 January 2024 (early adoption permitted) |
These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted. |
|
Amendment to IAS 1 - Non‑current liabilities with covenants |
1 January 2024 (early adoption permitted) |
These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also aim to improve information an entity provides related to liabilities subject to these conditions. |
|
Amendment to IAS 7 and IFRS 7 ‑ Supplier finance |
1 January 2024 (early adoption permitted) |
These amendments require disclosures to enhance the transparency of supplier finance arrangements and their effects on an entity's liabilities, cash flows and exposure to liquidity risk. The disclosure requirements are the IASB's response to investors' concerns that some companies' supplier finance arrangements are not sufficiently visible, hindering investors' analysis. |
|
Amendments to IAS 21 ‑ Lack of Exchangeability |
1 January 2024 (early adoption permitted) |
An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. |
These changes are not expected to have any impact on the Company in 2024 and beyond.
2.12. Accounting estimates and judgements
Estimates and judgements need to be regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results.
The estimates and underlying assumptions are reviewed on an on‑going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates significant to the financial statements during the year and at the year‑end is the consideration of the fair value of financial assets at FVPL as set out in the relevant accounting policies shown above. A number of the financial assets at FVPL held by the Company are at an early stage of their development. The Company cannot yet carry out regular reliable fair value estimates of some of these investments. Future events or transactions involving the companies invested in may result in more accurate valuations of their fair values (either upwards or downwards) which may affect the Company's overall net asset value.
As summarised in note 10 the Company has investments held at year‑end of US$96,422,492 (2022: US$94,755,170) classified as level 2 in the fair value hierarchy, valued on a comparable company analysis basis. The Company has a further US$80,653,740 (2022: US$77,512,433) classified as level 3, valued at cost or price of recent investment (less any currency exchange‑related impairment charges). Generally, when impairments are used in the comparable company valuation methodology, impairments are allocated on a 50%‑66% basis when management determine that there is increased uncertainty over the investee's business prospects and/or exit strategy, or a 100% basis when management determine that the investment is unlikely to be recovered. Readers of these financial statements should consider the inherent uncertainty principle involved when considering these investment valuations.
3. Gains/(Losses) on investments
|
|
For the year ended |
For the year ended |
|
|
USD |
USD |
|
Gross interest income from convertible notes receivable |
6,213 |
40,012 |
|
Net interest income from convertible notes receivable |
6,213 |
40,012 |
|
Gains/(Losses) on changes in fair value of financial assets at FVPL |
7,341,554 |
(79,638,928) |
|
Impairment of receivables |
(52,510) |
(249,060) |
|
Other gains/(losses) on investment |
62,303 |
(16,898) |
|
Total net gains/(losses) on investments |
7,357,560 |
(79,864,874) |
During the year ended 31 December 2023, impairment losses related to receivables for previously disposed investments of US$52,510 were recognised (2022: US$249,060).
4. Segmental analysis
Geographic information
The Company has investments in the following geographic areas: the USA, Canada, Estonia, the United Kingdom, Portugal, BVI and the Cayman Islands.
Non‑current financial assets
|
|
USA and Canada |
Cayman Islands |
BVI |
Estonia |
Cyprus |
United Kingdom |
Portugal |
Total |
|
As at 31/12/ 2023 |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
|
Equity investments |
73,579,189 |
- |
1,695,398 |
74,200,126 |
- |
34,987,820 |
- |
184,462,533 |
|
Convertible notes & SAFEs |
16,517,060 |
1,030,000 |
- |
- |
- |
- |
1,077,083 |
18,624,143 |
|
Total |
90,096,249 |
1,030,000 |
1,695,398 |
74,200,126 |
- |
34,987,820 |
1,077,083 |
203,086,676 |
|
|
USA and Canada |
Cayman Islands |
BVI |
Estonia |
Cyprus |
United Kingdom |
Portugal |
Total |
|
As at 31/12/ 2022 |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
|
Equity investments |
66,393,603 |
- |
3,255,052 |
71,759,682 |
330,000 |
30,481,358 |
- |
172,219,695 |
|
Convertible notes & SAFEs |
14,800,030 |
1,030,000 |
- |
1,628,090 |
4,100,000 |
601,950 |
880,770 |
23,040,840 |
|
Total |
81,193,633 |
1,030,000 |
3,255,052 |
73,387,772 |
4,430,000 |
31,083,308 |
880,770 |
195,260,535 |
5. Administrative expenses
Administrative expenses include the following amounts:
|
|
For the year ended |
For the year ended |
|
|
USD |
USD |
|
Staff expenses (note 6) |
845,218 |
825,366 |
|
Professional fees |
270,695 |
326,651 |
|
Legal fees |
26,818 |
82,941 |
|
Bank and LSE charges |
16,507 |
15,069 |
|
Audit fees |
50,985 |
59,577 |
|
Accounting fees |
20,070 |
17,480 |
|
Other expenses |
92,589 |
116,311 |
|
|
1,322,882 |
1,443,395 |
6. Staff expenses
|
|
For the year ended |
For the year ended |
|
|
USD |
USD |
|
Directors' fees |
216,818 |
212,166 |
|
Wages and salaries |
628,400 |
613,200 |
|
|
845,218 |
825,366 |
Wages and salaries shown above include fees and salaries relating to the year ended 31 December 2023.
The Directors' fees for 2023 were as follows:
|
|
For the year ended |
For the year ended |
|
|
USD |
USD |
|
Alexander Selegenev |
113,750 |
110,000 |
|
Yuri Mostovoy |
56,250 |
55,000 |
|
James Joseph Mullins |
28,077 |
27,081 |
|
Petr Lanin |
- |
9,347 |
|
Andrea Nastaj |
18,741 |
10,738 |
|
|
216,818 |
212,166 |
The Directors' fees shown above are all classified as 'short term employment benefits' under International Accounting Standard 24. The Directors do not receive any pension contributions or other benefits. The average number of staff employed (excluding Directors) by the Company during the year was 7 (2022: 7).
Key management personnel of the Company are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Company, directly or indirectly. Key management of the Company are therefore considered to be the Directors of the Company. There were no transactions with the key management, other than their fees and reimbursement of business expenses.
Under the Company's Bonus Plan, subject to achieving a minimum hurdle NAV and high watermark conditions, the team receives an annual cash bonus equal to 10% of the net increases in the Company's NAV, adjusted for any changes in the Company's equity capital resulting from issuance of new shares, dividends, share buy‑backs and similar corporate transactions. The Company`s bonus year runs from 1 January to 31 December. As the Company's adjusted NAV did not exceed the previously achieved high watermark during the financial year, no bonus accrued for the year ended 31 December 2023.
7. Net finance income
|
|
For the year ended |
For the year ended |
|
|
USD |
USD |
|
Interest income |
263,441 |
9,729 |
|
|
263,441 |
9,729 |
8. Income tax expense
The Company is incorporated in Jersey. No tax reconciliation note has been presented as the Company's current income tax rate in Jersey is 0%.
9. Gain/(Loss) per share
The calculation of basic gain per share is based upon the net losses for the year ended 31 December 2023 attributable to the ordinary shareholders of US$6,377,773 (2022: net loss of US$81,393,833) and the weighted average number of ordinary shares outstanding calculated as follows:
|
Gain per share |
For the year ended |
For the year ended |
|
Basic gain/(loss) per share (cents per share) |
20.28 |
(258.78) |
|
Gain/(Loss) attributable to equity holders of the entity |
6,377,773 |
(81,393,833) |
The weighted average number of ordinary shares outstanding was calculated as follows:
|
|
For the year ended |
For the year ended |
|
Weighted average number of shares in issue |
|
|
|
Ordinary shares |
31,451,538 |
31,451,538 |
|
|
31,451,538 |
31,451,538 |
10. Non‑current financial assets
Reconciliation of fair value measurements of non‑current financial assets:
|
|
At 31 December 2023 |
At 31 December 2022 |
|
Investments held at fair value through profit and loss, USD: |
|
|
|
‑ listed and unlisted shares (i) |
184,462,533 |
172,219,695 |
|
‑ promissory notes (ii) |
1,600,030 |
4,830,070 |
|
‑ SAFEs (iii) |
17,024,113 |
18,210,770 |
|
|
203,086,676 |
195,260,535 |
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Opening valuation |
195,260,535 |
265,454,136 |
|
Purchases (including consulting fees) |
4,686,489 |
9,608,593 |
|
Disposal proceeds |
(4,201,902) |
(163,266) |
|
Impairment losses in the year |
(10,289,184) |
(1,280,016) |
|
Realised loss |
1,098,401 |
- |
|
Unrealised gains/(losses) |
16,532,337 |
(78,358,912) |
|
Closing valuation |
203,086,676 |
195,260,535 |
|
Movement in unrealised gains/(losses) |
|
|
|
Opening accumulated unrealised gains |
118,262,354 |
195,706,888 |
|
Unrealised gains/(losses) |
16,532,337 |
(78,358,912) |
|
Transfer of previously unrealised gains/(losses) to realised reserve on disposal of investments |
(1,605,184) |
914,378 |
|
Closing accumulated unrealised gains |
133,189,507 |
118,262,354 |
Reconciliation of investments, if held under the cost and price of recent investment model:
|
Historic cost basis |
|
|
|
Opening book cost |
76,998,181 |
69,747,248 |
|
Purchases (including consulting fees) |
4,686,489 |
9,608,593 |
|
Disposals on sale of investment |
(1,498,317) |
(57,660) |
|
Impairment losses in the year |
(10,289,184) |
(2,300,000) |
|
Closing book cost |
69,897,169 |
76,998,181 |
|
Valuation methodology |
|
|
|
Level 1 ‑ Mid‑market price |
26,010,444 |
22,992,932 |
|
Level 2 ‑ Comparable company analysis |
96,422,492 |
94,755,170 |
|
Level 3 ‑ Cost or price of recent investment |
80,653,740 |
77,512,433 |
|
|
203,086,676 |
195,260,535 |
The estimates significant to the financial statements during the year and at the year‑end is the consideration of the fair value of financial assets at FVPL as set out in the relevant accounting policies shown above. A number of the financial assets at FVPL held by the Company are at an early stage of their development. The Company cannot yet carry out regular reliable fair value estimates of some of these investments. Future events or transactions involving the companies invested in may result in more accurate valuations of their fair values (either upwards or downwards) which may affect the Company's overall net asset value.
Valuation methodologies can be changed from time to time, the following table shows the changes made for 2023 compared to 2022. These investments were held at cost or price of recent investments of the total value of US$7,876,217 as of 31 December 2022:
|
Company name |
2023 |
2022 |
|
Cheetah (Go‑X) |
Comparable company analysis |
Cost and price of recent investment |
|
Muncher |
Comparable company analysis |
Cost and price of recent investment |
|
Qumata |
Comparable company analysis |
Cost and price of recent investment |
The following table shows the changes made for 2022 compared to 2021. These investments were held at cost or price of recent investments of the total value of US$133,457,069 as of 31 December 2021:
|
Company name |
2022 |
2021 |
|
3D Look |
Comparable company analysis |
Cost or price of recent investment |
|
Affise |
Comparable company analysis |
Cost or price of recent investment |
|
Academy of change |
Comparable company analysis |
Cost or price of recent investment |
|
Bolt |
Comparable company analysis |
Cost or price of recent investment |
|
EstateGuru |
Comparable company analysis |
Cost or price of recent investment |
|
MEL Science |
Comparable company analysis |
Cost or price of recent investment |
|
Moeco |
Comparable company analysis |
Cost or price of recent investment |
|
PandaDoc |
Comparable company analysis |
Cost or price of recent investment |
|
Scalarr |
Comparable company analysis |
Cost or price of recent investment |
|
Study Space, Inc (EdVibe) |
Comparable company analysis |
Cost or price of recent investment |
|
Wanelo |
Comparable company analysis |
Cost or price of recent investment |
The list of fully impaired investments, in which the Company still maintained ownership as of 31 December 2023, was as follows:
|
Company name |
Investment |
Year of |
|
Rollapp |
350,000 |
2018 |
|
UsingMiles/Help WW/Source Inc. |
250,000 |
2018 |
|
Favim |
300,000 |
2018 |
|
AdInch |
1,000,000 |
2018 |
|
E2C |
124,731 |
2020 |
|
Drupe |
225,000 |
2019 |
|
Virool/Turgo |
600,000 |
2017 |
|
Sixa |
900,000 |
2019 |
|
Usual Beverage Co. |
300,000 |
2022 |
|
StudyFree |
1,000,000 |
2022 |
|
Wanelo |
355,000 |
2023 |
|
Rocket Games (Legionfarm) |
1,650,000 |
2023 |
|
Scalarr |
1,999,999 |
2023 |
|
Academy of change |
1,000,000 |
2023 |
|
Conte.ai/Postoplan |
1,784,185 |
2023 |
|
Metrospeedy |
1,000,000 |
2023 |
|
BaFood |
2,500,000 |
2023 |
|
Total |
15,338,915 |
|
Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.
When measuring the fair value of a financial instrument, the Company uses relevant transactions during the year or shortly after the year end, which gives an indication of fair value and considers other valuation methods to provide evidence of value. The "price of recent investment" methodology is used mainly for venture capital investments, and the fair value is derived by reference to the most recent financing round or sizeable partial disposal. Fair value change is only recognised if that round or partial disposal involved a new external investor. From time to time, the Company may assess the fair value in the absence of a relevant independent transaction by relying on other market observable data and valuation techniques, such as the analysis of comparable companies and/or comparable transactions. The nature of such valuation techniques is highly judgmental and dependent on the market sentiment at the time of the analysis.
(i) Equity investments as at 31 December 2023:
|
Investee company |
Date of initial investment |
Value at 1 Jan 2023, USD |
Additions to equity investments during the period, USD |
Conversions from loan notes and SAFEs, USD |
Gain/loss from changes in fair value of equity investments, USD |
Disposals, USD |
Value at 31 Dec 2023, USD |
Fully diluted equity stake owned |
|
Wanelo |
21.11.2011 |
602,447 |
- |
- |
(602,447) |
- |
- |
<5% |
|
Backblaze |
24.07.2012 |
22,992,931 |
- |
- |
5,361,765 |
(2,344,253) |
26,010,443 |
5‑10% |
|
Remote.it |
13.06.2014 |
131,200 |
- |
- |
- |
- |
131,200 |
<5% |
|
Bolt |
15.09.2014 |
69,756,984 |
- |
- |
2,424,114 |
- |
72,181,098 |
<5% |
|
PandaDoc |
11.07.2014 |
10,844,468 |
- |
- |
(2,830,644) |
- |
8,013,824 |
<5% |
|
Full Contact |
11.01.2018 |
244,506 |
- |
- |
- |
- |
244,506 |
<5% |
|
Scentbird |
13.04.2015 |
6,590,954 |
- |
- |
418,646 |
- |
7,009,600 |
<5% |
|
Workiz |
16.05.2016 |
3,971,659 |
- |
- |
- |
- |
3,971,659 |
<5% |
|
Hugo |
19.01.2019 |
3,255,052 |
- |
- |
(40) |
(1,559,614) |
1,695,398 |
<5% |
|
MEL Science |
25.02.2019 |
905,656 |
- |
- |
- |
- |
905,656 |
<5% |
|
Qumata |
06.06.2019 |
1,818,822 |
- |
- |
(909,411) |
- |
909,411 |
<5% |
|
eAgronom |
31.08.2018 |
454,678 |
- |
- |
(37,465) |
- |
417,213 |
<5% |
|
Rocket Games (Legionfarm) |
16.09.2019 |
200,000 |
- |
- |
(200,000) |
- |
- |
<5% |
|
Timbeter |
05.12.2019 |
213,520 |
- |
- |
7,420 |
- |
220,940 |
<5% |
|
Classtag |
03.02.2020 |
200,000 |
- |
200,000 |
(101,965) |
(298,035) |
- |
<5% |
|
3S Money Club |
07.04.2020 |
14,090,596 |
- |
- |
3,016,809 |
- |
17,107,405 |
10‑15% |
|
Hinterview |
21.09.2020 |
812,730 |
- |
- |
47,796 |
|
860,526 |
<5% |
|
Virtual Mentor (Allright) |
12.11.2020 |
772,500 |
- |
- |
- |
- |
772,500 |
<5% |
|
NovaKid |
13.11.2020 |
2,949,855 |
- |
- |
- |
- |
2,949,855 |
<5% |
|
MTL Financial (OutFund) |
17.11.2020 |
2,565,918 |
- |
- |
150,899 |
- |
2,716,817 |
<5% |
|
Scalarr |
15.08.2019 |
1,378,282 |
- |
- |
(1,378,282) |
- |
- |
5‑10% |
|
Accern |
21.08.2019 |
2,873,884 |
- |
- |
- |
- |
2,873,884 |
<5% |
|
Feel |
13.08.2020 |
3,653,220 |
- |
- |
214,842 |
- |
3,868,062 |
10‑15% |
|
Affise |
18.09.2019 |
1,795,680 |
- |
- |
- |
- |
1,795,680 |
5‑10% |
|
3D Look |
03.03.2021 |
500,000 |
- |
- |
- |
- |
500,000 |
<5% |
|
FemTech |
30.03.2021 |
810,606 |
55,084 |
- |
51,017 |
- |
916,707 |
5‑10% |
|
Muncher |
23.04.2021 |
3,707,395 |
- |
2,000,000 |
(2,853,697) |
- |
2,853,698 |
5‑10% |
|
CyberWrite |
20.05.2021 |
975,741 |
100,000 |
- |
- |
- |
1,075,741 |
<5% |
|
Outvio |
22.06.2021 |
533,800 |
- |
- |
18,550 |
- |
552,350 |
<5% |
|
Collectly |
07.06.2023 |
- |
- |
6,449,328 |
- |
- |
6,449,328 |
<5% |
|
VertoFX |
16.07.2021 |
1,132,999 |
- |
- |
- |
- |
1,132,999 |
<5% |
|
Academy of change |
02.08.2021 |
330,000 |
- |
- |
(330,000) |
- |
- |
|
|
EstateGuru |
06.09.2021 |
800,700 |
- |
- |
27,825 |
- |
828,525 |
<5% |
|
Prodly |
09.09.2021 |
1,800,000 |
- |
- |
- |
- |
1,800,000 |
<5% |
|
Sonic Jobs |
15.09.2021 |
620,009 |
- |
- |
283,666 |
- |
903,675 |
<5% |
|
EdVibe (Study Space, Inc) |
02.11.2021 |
750,000 |
- |
- |
- |
- |
750,000 |
5‑10% |
|
1Fit (Alippe, Inc) |
24.12.2021 |
500,000 |
- |
- |
1,080,320 |
- |
1,580,320 |
<5% |
|
Agendapro |
03.09.2021 |
515,000 |
- |
- |
395,609 |
- |
910,609 |
<5% |
|
Laundryheap |
28.01.2022 |
1,203,801 |
- |
601,950 |
993,810 |
- |
2,799,561 |
<5% |
|
My Device Inc |
30.11.2021 |
- |
- |
1,789,241 |
- |
- |
1,789,241 |
5‑10% |
|
SOAX |
21.01.2022 |
4,000,000 |
- |
- |
- |
- |
4,000,000 |
5‑10% |
|
Spin.ai |
17.12.2018 |
964,102 |
- |
- |
- |
- |
964,102 |
<5% |
|
Total |
|
172,219,695 |
155,084 |
11,040,519 |
5,249,137 |
(4,201,902) |
184,462,533 |
|
(ii) Convertible loan notes as at 31 December 2023:
|
Investee company |
Date of initial investment |
Value at 1 Jan 2023, USD |
Additions to convertible note investments during the period, USD |
Conversions to equity, USD |
Gain/loss from changes in fair value of convertible loan notes, USD |
Disposals, USD |
Value at 31 Dec 2023, USD |
|
Sharethis |
26.03.2013 |
570,030 |
- |
- |
- |
- |
570,030 |
|
Conte.ai/ Postoplan |
08.12.2020 |
1,628,090 |
- |
- |
(1,628,090) |
- |
- |
|
Metrospeedy |
16.07.2021 |
1,000,000 |
- |
- |
(1,000,000) |
- |
- |
|
MedVidi |
27.09.2021 |
1,030,000 |
- |
- |
- |
- |
1,030,000 |
|
Laundryheap |
21.11.2022 |
601,950 |
- |
(601,950) |
- |
- |
- |
|
Total |
|
4,830,070 |
- |
(601,950) |
(2,628,090) |
- |
1,600,030 |
(iii) SAFEs as at 31 December 2023:
|
Investee company |
Date of initial investment |
Value at 1 Jan 2023, USD |
Additions to SAFE investments during the period, USD |
Conversions to equity, USD |
Gain/loss from changes in fair value of SAFE investments, USD |
Disposals, USD |
Value at 31 Dec 2023, USD |
|
Cheetah (Go‑X) |
29.07.2019 |
350,000 |
- |
- |
(175,000) |
- |
175,000 |
|
Adwisely (Retarget) |
24.09.2019 |
1,600,000 |
- |
- |
- |
- |
1,600,000 |
|
Rocket Games (Legionfarm) |
17.09.2019 |
1,450,000 |
- |
- |
(1,450,000) |
- |
- |
|
Classtag |
03.02.2020 |
200,000 |
- |
(200,000) |
- |
- |
- |
|
Moeco |
08.07.2020 |
500,000 |
- |
- |
- |
- |
500,000 |
|
Aurabeat |
03.05.2021 |
1,030,000 |
- |
- |
- |
- |
1,030,000 |
|
Synder (CloudBusiness Inc) |
26.05.2021 |
2,060,000 |
- |
- |
1,368,571 |
- |
3,428,571 |
|
Collectly |
13.07.2021 |
2,060,000 |
- |
(6,449,328) |
4,389,328 |
- |
- |
|
OneNotary (Adorum) |
01.10.2021 |
500,000 |
- |
- |
- |
- |
500,000 |
|
BaFood |
05.11.2021 |
2,500,000 |
- |
- |
(2,500,000) |
- |
- |
|
Educate online |
16.11.2021 |
1,000,000 |
- |
- |
1,847,458 |
- |
2,847,458 |
|
My Device Inc |
30.11.2021 |
1,050,000 |
- |
(1,789,241) |
739,241 |
- |
- |
|
Mobilo (Lulu Systems, Inc) |
09.12.2021 |
1,030,000 |
200,000 |
- |
470,000 |
- |
1,700,000 |
|
Muncher |
13.12.2021 |
2,000,000 |
- |
(2,000,000) |
- |
- |
- |
|
Bairro |
12.01.2022 |
880,770 |
165,405 |
- |
30,909 |
- |
1,077,084 |
|
1Fit (Alippe, Inc) |
19.04.2023 |
- |
500,000 |
- |
- |
- |
500,000 |
|
GameOn |
19.06.2023 |
- |
1,030,000 |
- |
- |
- |
1,030,000 |
|
Phoenix |
29.05.2023 |
- |
515,000 |
- |
- |
- |
515,000 |
|
Montera |
02.08.2023 |
- |
721,000 |
- |
- |
- |
721,000 |
|
Rain Technologies Inc. |
17.10.2023 |
- |
1,000,000 |
- |
- |
- |
1,000,000 |
|
Praktika.ai |
29.12.2023 |
- |
400,000 |
- |
- |
- |
400,000 |
|
Total |
|
18,210,770 |
4,531,405 |
(10,438,569) |
4,720,507 |
- |
17,024,113 |
11. Trade and other receivables
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Prepayments |
60,914 |
42,550 |
|
Other receivables |
18,145 |
1,219,506 |
|
Interest receivable on promissory notes |
66,917 |
113,214 |
|
Interest receivable on deposit |
5,932 |
7,541 |
|
|
151,908 |
1,382,811 |
The fair value of trade and other receivables approximate to their carrying amounts as presented above.
Other receivables as of 31 December 2023 represented amounts due from the disposed investment in Classtag.
12. Cash and cash equivalents
The cash and cash equivalents as at 31 December 2023 included cash and cash equivalents in banks and brokers.
Cash and cash equivalents comprised the following:
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Treasury bills |
1,732,693 |
- |
|
Deposits |
1,164,380 |
2,502,188 |
|
Bank balances |
3,693,862 |
7,600,495 |
|
|
6,590,935 |
10,102,683 |
The following table represents an analysis of cash and equivalents by rating agency designation based on Moody`s rating or their equivalent:
|
|
At 31 December 2023 |
At 31 December 2022 |
|
Bank balances |
USD |
USD |
|
C rating |
119,041 |
7,587,687 |
|
Caa2 rating |
3,566,010 |
- |
|
Baa3 rating |
1,736 |
2,447 |
|
Not rated |
7,075 |
10,361 |
|
|
3,693,862 |
7,600,495 |
|
|
At 31 December 2023 |
At 31 December 2022 |
|
Deposits |
USD |
USD |
|
A1 rating |
1,164,380 |
2,502,188 |
|
|
1,164,380 |
2,502,188 |
|
|
At 31 December 2023 |
At 31 December 2022 |
|
Treasury bills |
USD |
USD |
|
AAA rating |
1,732,693 |
- |
|
|
1,732,693 |
- |
13. Trade and other payables
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Salaries payable |
16,000 |
81,838 |
|
Directors' fees payable |
12,622 |
66,100 |
|
Bonuses payable |
1,638,709 |
4,817,785 |
|
Trade payables |
10,156 |
7,702 |
|
Other current liability |
162 |
3,307 |
|
Accruals |
40,167 |
35,367 |
|
|
1,717,816 |
5,012,099 |
The fair value of trade and other payables approximate to their carrying amounts as presented above.
14. Share capital
On 31 December 2023 the Company had an authorised share capital of unlimited ordinary shares of no par value and had issued ordinary share capital of:
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Share capital |
53,283,415 |
53,283,415 |
|
Issued capital comprises: |
Number |
Number |
|
Fully paid ordinary shares |
31,451,538 |
31,451,538 |
|
|
Number of shares |
Number of shares |
|
Balance at 31 December 2022 |
31,451,538 |
31,451,538 |
|
Issue of ordinary shares |
- |
- |
|
Balance at 31 December 2023 |
31,451,538 |
31,451,538 |
15. Capital management
The capital structure of the Company consists of equity share capital, reserves, and retained earnings.
The Board's policy is to maintain a strong capital base so as to maintain investor and market confidence and to enable the successful future development of the business.
The Company is not subject to externally imposed capital requirements.
No changes were made to the objectives, policies and process for managing capital during the year.
16. Financial risk management and financial instruments
The Company has identified the following risks arising from its activities and has established policies and procedures to manage these risks. The Company's principal financial assets are cash and cash equivalents, investments in equity shares, and convertible notes receivable.
Credit risk
As at 31 December 2023 the largest exposure to credit risk related to convertible notes receivable and SAFEs (US$18,624,143, as at 31 December 2022 ‑ US$23,040,840), and cash and cash equivalents (US$6,590,935, as at 31 December 2022 ‑ US$10,102,683).
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each investee company. The credit quality of investments in equity shares and convertible promissory notes is based on the financial performance of the individual portfolio companies. For those assets that are not impaired it is believed that the risk of default is small and that capital repayments and interest payments will be made in accordance with the agreed terms and conditions of the Company's investment. In other cases, an appropriate asset impairment is recorded to reflect the fair value. The exposure to credit risk is approved and monitored on an on‑going basis individually for all significant investee companies.
The exposure risk is reduced because the counterparties are banks with high credit ratings ("BBB+" Liquidity banks) assigned by international credit rating agencies. The Directors intend to continue to spread the risk by holding the Company's cash reserves in more than one financial institution.
(i) Exposure to credit risk
The carrying amount of the following assets represents the maximum credit exposure. The maximum exposure to credit risk as at 31 December was as follows:
|
|
At 31 December 2023 |
At 31 December 2022 |
|
|
USD |
USD |
|
Convertible notes receivable & SAFEs |
18,624,143 |
23,040,840 |
|
Trade and other receivables |
151,908 |
1,382,811 |
|
Cash and cash equivalents |
6,590,935 |
10,102,683 |
|
|
25,366,986 |
34,526,334 |
Market risk
The Company's financial assets are classified as financial assets at FVPL. The measurement of the Company's investments in equity shares and convertible notes is largely dependent on the underlying trading performance of the investee companies, but the valuation and other items in the financial statements can also be affected by fluctuations in interest and currency exchange rates.
Interest rate risk
Changes in interest rates impact primarily cash and cash equivalents by changing either their fair value (fixed rate deposits) or their future cash flows (variable rate deposits). Management does not have a formal policy of determining how much of the Company's exposure should be to fixed or variable rates. At 31 December 2023 the Company had cash deposit of USD 4,730,390 (as at 31 December 2022 ‑ US$2,502,188), earning a variable rate of interest. The Board of Directors monitors the interest rates available in the market to ensure that returns are maximized.
Foreign currency risk management
The Company is exposed to foreign currency risks on investments and salary and director remuneration payments that are denominated in a currency other than the functional currency of the Company. The currency giving rise to this risk is primarily GBP and EUR. The exposure to foreign currency risk as at 31 December 2023 was as follows:
|
|
At 31 December 2023 |
At 31 December 2023 |
At 31 December 2022 |
At 31 December 2022 |
|
|
GBP |
EUR |
GBP |
EUR |
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
84,373 |
8,775 |
171,705 |
177,998 |
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
(15,162) |
- |
(14,861) |
- |
|
Net (short) long position |
69,211 |
8,775 |
156,844 |
177,998 |
|
Net exposure currency |
54,296 |
7,943 |
130,280 |
166,727 |
|
Net exposure currency (assuming a 10% movement in exchange rates) |
62,290 |
7,897 |
141,160 |
160,198 |
|
Impact on exchange movements in the statement of comprehensive income |
6,921 |
878 |
15,684 |
17,800 |
The foreign exchange rates of the USD at 31 December were as follows:
|
|
31/12/2023 |
31/12/2022 |
|
Currency |
|
|
|
British pounds |
1.2747 |
1.2039 |
|
Euro |
1.1047 |
1.0676 |
This analysis assumes that all other variables, in particular interest rates, remain constant.
Fair value and liquidity risk management
The Company's approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company.
The Company has low liquidity risk due to maintaining adequate banking facilities, by continuously monitoring actual cash flows and by matching the maturity profiles of financial assets and current liabilities.
As at 31 December 2023, the cash and equivalents of the Company were US$6,590,935. As at 31 December 2022, the cash and equivalents of the Company were US$10,102,683
The following are the maturities of current liabilities as at 31 December 2023:
|
|
Carrying amount |
Within one year |
2‑5 |
More than 5 years |
|
|
USD |
USD |
USD |
USD |
|
Salaries |
16,000 |
16,000 |
- |
- |
|
Directors' fees payable |
12,622 |
12,622 |
- |
- |
|
Bonuses payable |
1,638,709 |
1,638,709 |
- |
- |
|
Trade payables |
10,156 |
10,156 |
- |
- |
|
Other current liabilities |
162 |
162 |
- |
- |
|
Accruals |
40,167 |
40,167 |
- |
- |
|
|
1,717,816 |
1,717,816 |
- |
- |
The following table analyses the fair values of financial instruments measured at fair value by the level in the fair value hierarchy as at 31 December 2023:
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|
USD |
USD |
USD |
USD |
|
Financial assets |
|
|
|
|
|
Financial assets at FVPL |
26,010,444 |
96,422,492 |
80,653,740 |
203,086,676 |
|
|
26,010,444 |
96,422,492 |
80,653,740 |
203,086,676 |
17. Related party transactions
The Company's Directors receive fees and bonuses from the Company, details of which can be found in Note 6.
18. Subsequent events
In January 2024, TMT received a total additional US$1.5 million in dividends from Hugo, as part of the consideration for Hugo's disposal of its food delivery and quick commerce business in Central America to Delivery Hero completed in 2022.
TMT invested US$1,000,000 in Propertymate Inc., trading as NewHomesMate, a marketplace for newly built homes (www.newhomesmate.com).
TMT disposed a part of its shares in NASDAQ‑traded Backblaze for a total net consideration of US$4.2 million.
19. Control
The Company is not controlled by any one party. Details of significant shareholders are shown in the Directors' Report.
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